The media is giving mixed reports of Cardinal Dolan’s interview on Meet the Press with David Gregory. According to Fox News, the Catholics oppose Obamacare and, according to NBC News, the Catholics embrace it.

The reports merely focus on two different parts of the Cardinal’s discussion. The Catholics (A) support universal health insurance and (B) oppose the parts of Obamacare that mandate Catholic institutions provide coverage for contraception, abortion and other procedures prohibited by the Catholic Church.

Giving the recent dramatic shift in the teachings of the Catholic Church regarding free market-oriented economics, I’m going to say a few words on behalf of the Cardinal Dolan:

The Catholics generally support a government that is medium-size. They cannot support big government. The opposition to big government is very clear. They generally do not support a government that is small. From time to time, they have attacked small government, but not in ways that are as clear as their attacks on big government. It may be possible for the Catholics to encompass both the small and the medium-sized government-types; but, the Catholic Church has generally not been a comfortable place for small government-types.

Pope John Paul II was kind of an exception to the rule among the leaders of the Catholic Church with regard to small government, at least with regard to the focus and tenor of his teachings. I may be exaggerating a bit, but when John Paul II was Pope, atheistic communism was the Great Satan in the world. Today, according to Pope Francis, it is free market economics. In his words, the “trickle down theory” of economics is the “new tyranny” in the world.

Thus, Cardinal Dolan, in defending universal health insurance, is in keeping with the mainstream of Catholic political economy. My defense of Cardinal Dolan will be based, however, on a different principle. instead of supporting medium-sized government, I will say that it is unjust to condition charity on not working. This principle is called “less eligibility.” A person should not be made less eligible for benefits because he works. This principle was developed by the private charity movement of the 19th Century, which was mostly a Protestant initiative, but was embraced at the time by some Catholics. I am not aware, however, that the Catholics have ever spoken on this principle.

According to the principle of less eligibility, denying charity to poor people because they work is evil. It not only undermines the incentive to work, it robs the poor of the dignity that comes with work, and it replaces “agape” or friendly love with sympathy. Instead of seeing the poor as like ourselves, in that they, too, work, it sees the poor as objects of pity, and replaces brotherhood as the basis of charity with victimhood.

According to the principle of less eligibility, once the government starts to get into the charity business, and starts to dispense goodies like cash benefits, food stamps, health insurance, housing vouchers, Pell Grants, and so forth, the discrimination among the poor based on working becomes an issue. If those on welfare who do not work have health insurance, why is health insurance denied to those who are poor who work.

My mother, who was one of the working poor of this country, in her old age put it this way: Why do prisoners have health care, and she did not? It was no use for me to remind her that she had health insurance through Medicare, as she had problems with her memory. I told her, Mom, if you need an operation, you can rob a bank. If you’re successful, you’ll have the money for your operation. And, if you’re not successful, you’ll wind up in prison where you’ll get the operation for free.

In theory, we could have a tax and welfare system consisting of (A) a package of benefits, mostly non-cash, and including health insurance, for those at the very bottom, and (B) a tax rate – let’s say 20 percent – where you start losing the benefits as you start to have income, eventually come to a break-even point, and then start paying taxes. With this kind of system, we would have a floor but no ceiling to income, and at every point along the income distribution people would have a good incentive to work. I think the system I have just described would be o.k. with most people who support small to medium-sized government, although maybe it would not be o.k. to all at either end of this range.

But, here’s the problem for the Catholic Church: church leaders cannot pretend to know what is the right amount of the basic grant or what is the right mix of cash and non-cash benefits in that basic grant, and what is the right tax rate to make this tax and welfare system work. That would be for government leaders to decide, relying on economic advisors and their own good judgment.

My judgment, as an economist, is that the dollar value of Obamacare is way too high for it to be affordable by the taxpayer for those who are subsidized, or to be affordable by those at the lower end of the income distribution who are not subsidized. Also, that the dollar value of the total package of welfare benefits – cash and non-cash benefits – is too high (mostly because of the health insurance part of the package). And, that the effective tax rate on those at the low end of the income distribution is way too high, approximately 100 percent, so that there is little incentive to work.

So, speaking as an economist, the particulars of Obamacare and of the tax system have to be addressed. But, the principle that nobody should be treated more shabbily because they work implies that if welfare recipients get health insurance so too should poor working people.

I would to conclude by returning to the insight into brotherhood developed by the 19th century private charity movement. As described by Joseph Tuckerman, the first leader of this movement in this country, we are all called to be our brother’s keeper, both the rich and the poor, each of us expected to work and be self-responsible to the extent that we are able. To this teaching, I would like to append the remarkable insight into brotherhood developed by Pope John Paul II. He said that by developing a sense of self in the context of a private property-based, market-oriented economy, a person might fall in love with himself; and, by entering into relations with others on the basis of free association, he might come to love others as he loves himself.

Et tu, Cardinal Dolan? “Less Eligibility” as justification for Obamacare was last modified: December 3rd, 2013 by Clifford Thies